Can Nestlé Survive Without (Cookie) Dough?

This shortage of dough is something not even Ben Bernanke could control.

Nestlé announced last week that its refrigerated cookie dough -- chocolate chip, oatmeal raisin, and many others -- might be in temporary supply due to E. coli contamination.

The popular sweets company is taking the precautionary measure since more than 70 people were reportedly infected with E. coli, and its dough facility in Danville, VA, tested positive for the bacterium as well.

The cookie dough situation, however, is unique in comparison to past E. coli recalls.

For instance, in 2006, an E. coli outbreak in “fresh spinach” instigated a rapid recall of the item from stores, market places, and mainstream restaurants. At first, the pre-packing lettuce facility was blamed for using dirty machinery -- yet, after further review, it was found that the water irrigation system had traces of cattle feces, thus resulting in the infected supply of spinach.

Nestlé, however, is dealing with a whole other bag of worms -- or flour, for that matter. Even though Nestlé has already pinpointed flour as the culprit, it is still uncertain how the general public will react to its future replacement product and, more importantly, mass-produced baked products in general.

It is not unreasonable to surmise that Nestlé’s cookie dough debacle could certainly raise concerns for other baked goods companies. Considering the spinach E. coli scare cost spinach farmers, collectively, around $70 million, it is daunting to think about the financial ramifications of customers backing away from flour-based products.